LTV question

[Jamie Spitale]

scenario:

Let's say I find a home valued at 100k and the seller is asking 65k to purchase the property.

This 35%LTV right?

If I am correct and I find a lender who requires 25-35% LTV to fund the loan will the lender fund it with no money out of my pocket? Or do they usually want you to put in 25-35% of the actual loan?

I know lenders require different things but as a general rule is all I am asking.  This will help me to decide to jump in now or in a few months.  

[Jesse Hinaman]

@Jamie Spitale

LTV is Loan to Value so $65k owed on a property valued at $100k is 65% LTV and 35% is your equity.

Lenders will go by the lower of two valuations. Either the appraisal value or the purchase price. So even if the property appraised for $100k, the lender will use the purchase price of $65k as the valuation. Therefore, you would still need to put down 25-35% of the $65k purchase price.

Hard money lender may be more flexible and use their conservative estimate of the property value as a basis, but they are most likely going to want you to have skin in the game and large down payment.